Processing Constant Transmissions between Locations

Setting up a private line, sometimes called a leased line, means actually renting the copper wire that connects two offices. If you use a long-distance modem connection for eight hours a day, five days a week, in order to access some information, it might be more cost-effective to simply rent the wire in between the offices instead of paying the per-minute charge for modem transfers.

Businesses haven’t been dialing up with modems to transfer large amounts of data for a while, so the primary use of leased lines today is to act as an extension of your local area network (LAN). You can order a private line as large as you want, from a T-1 line capable of passing 1.54 Mbps (megabits per second); you can also order a DS-3 line, which can pass 45 Mbps, or an OC-3 line, which passes 155 Mbps. When you have the private line built, it is little more than a large empty pipe. This fact gives you a couple of areas of flexibility:

• You can transmit any kind of data you want. A private line gives you a link between two locations that can be used for anything from voice phone calls to videoconferencing and data transfers.

• You can transmit data in whatever method that works for your network. You can transmit voice calls via normal TDM (time division multiplexing) technology, or maybe you want to use Voice over IP (VoIP) technology.

 Remember  When you order your private line, your carrier will identify each end of the circuit as either the A location or the Z location.

Private line pricing

Private line pricing increases as the distance between the two offices increases. The size of the private line you request also determines pricing. The price you receive for a private line includes the cost for local loops from both ends to the nearest Point of Presence (POP) for your long distance carrier and the long-haul mileage between the POPs.

 Remember  The long-haul cost is generally based on a specific charge per mile per DS0. If you have a 100-mile long haul for a T-1 circuit where the per-mile charge was $0.20, you would expect this section of your circuit to cost $480.00 (0.20 x 24 channels in a T-1 x 100 miles). If the circuit was a DS-3 rather than a T-1 the long-haul portion alone would be $13,440.00.

 Tip  Figure 14-1 shows how a private line is built with two local loops that span from the long-distance POP to the end locations, with the long-haul mileage in the center. Because private line quotes only list two items, the installation fee and the monthly charge, you won’t know how these totals are derived. If the quote is excessively high, ask for quotes from other carriers. The local loop fees vary from one carrier to another depending upon where their POPs are located in relation to your office. The difference in this one element alone could save you hundreds of dollars a month.

Figure 14-1: A typical private line with two local loops and a long-haul portion between.

 Remember  Private lines are a low-profit item for most carriers, so they often encourage you to sign a longer contract by reducing the cost as the terms increase. The difference between a 12- and a 36-month contract might be substantial, but remember that you are on the hook for 2 more years than you might want to be. The one guarantee I give you about telecom is that it’s always changing. Any contract longer than 12 months might prevent you from upgrading to a newer, better, less expensive alternative.

Drawbacks of private lines

The downside of private lines is their cost, and the fact that each private line can connect only two sites. The farther a private line stretches, the more it costs per month. A T-1 private line from Los Angeles to New York may cost $6,000 per month, and if you don’t use it very often, it may not be worth the monthly payment. Nowadays, businesses can send data in e-mails or across the Internet. If you deem the level of security on the Internet acceptable for your purposes, private lines might not be such a great deal.

The other problem with private lines occurs if you want to connect more than two locations. You can connect more than two locations with private lines, but this setup is anything but cost-effective. Figure 14-2 shows what it would take to tie together offices in Seattle, Washington; San Diego, California; Miami, Florida; and Boston, Massachusetts. Each line that spans from one POP to another is a private line, with a total of six lines required to provide complete redundancy. This type of setup is geared for security and invariably builds a network with too much capacity, and a monthly cost that could easily top $50,000. Yikes!

Figure 14-2: A private line network with four locations is likely to be too expensive and inefficient.